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Minister prioritises load shedding and the ‘very expensive’ cost of electricity as two issues that need to be resolved quickly.
Minerals and Energy Minister Gwede Mantashe said on Friday that to get his newly merged ministry firing in all cylinders, the first step was to ensure that it functioned as a single department with a reduced number of branches from 13 to eight, which he expected to conclude by next week.
“We want to have a department that is a responsive department that is capable of dealing with issues [we] face,” he said, adding that one of the first changes was to have an open-door policy in which citizens would not need an appointment before receiving service.
He said the mining sector, although it was cyclic, remained one of the key factors in contributing towards government’s economic growth targets.
In the first quarter of this year mining contributed to a decline in GDP but recovered in the second quarter, he said.
“That is the nature of the animal and we understand because we are appreciative of that.”
But two issues remained critical, said Mantashe.
“Load shedding is bad for mining and energy. Because when there is load shedding at any point in time, a mine that is operational can produce, at most, only 70% of its capacity.
“And when you add those cumulatively, that translates into a decline of the production of the sector.”
Second, Mantashe said: “The price of electricity is very expensive and we are starting a debate on how to deal with that issue.” He said the electricity crisis was not going to be resolved through “tinkering with small issues”, adding that “the first thing is to have a meeting with coal producers – scheduled for later this month – to say to them guys, coal cannot be expensive to Eskom, so, let us index it.”
He said the new price could be set by industry players. Further, said Mantashe, the costs for renewables could be looked at because “we cannot continue this uptake agreement at these prices”.
He said the department of public enterprises should assess the skills profile of Eskom and if the required skills to get Eskom going were available only outside the country, then so be it.
Last, he said, another option could be to reduce the prices of electricity by 20% (a hypothetical figure) for key sectors that are intensive consumers of electricity, including mining and manufacturing.
In an aside to the business of the department, Mantashe said he would not fire the “young” speech writer responsible for the hoax mineral gaffe during a mining conference in Australia last week.
This comes after Mantashe last Wednesday promoted the nonexistent mineral “hazenile” to investors when addressing the mining conference in Australia – realising only later that earlier reports of the discovery were April Fool’s jokes.
“If you are learning, you commit mistakes and we must not destroy you because you have committed a mistake,” Mantashe told journalists at his offices in Pretoria on Friday.
He said he was putting together a young team in his department and he wanted them to learn because “I am grooming young economists”.
He said that he took responsibility for the embarrassing incident because, as old as he was, he read the speech three times and did not pick up the mistake.
“Why should you chase young people when they make mistakes? They commit mistakes, you guide them, you call your team and say: Guys, let us scrutinise the information thoroughly,” he said, adding that the key was to ensure that a similar thing did not happen again.
However, he said, critics should not be excited by “a mistake of two lines in a speech of eight pages” that was “well received” during the plenary at the gathering in Australia.
“There is an Australian investor who has already approached us since that last week.”
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